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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Us 8, Harry Reid 5, Geico 4, America 3, Obama 3, Tom 2, Alex Rodriguez 2, Larry Kudlow 2, Vitter 2, Dolly 2, Greece 2, Manhattan 2, Vittner 1, Lance Armstrong 1, Cisco 1, Michele Caruso Cabrera 1, Devry University 1, Ho Ho 1, Microsoft 1, Illustra 1,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    January 29, 2013
    7:00 - 8:00pm EST  

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so the president was light on border security plans. in agreement with the gang of eight's proposal. the question is it going to go through congress and should it go through. joining us the distinguished republican senator from louisiana david vitter and cnbc's own michele caruso cabrera. >> thank you. >> you do not want it to go through? yoo first of all, it is a vague outline. yes, i have a lot of questions. i don't think it will solve the problem. i'm for anything that solves the problem. to me, this sounds like the same old same old combination of promises of enforcement with immediate amnesty. that has never worked before.
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best case of that is 1986 under president reagan. that was supposed to be the final amnesty. never have to look back. solve the problem. instead of solving the problem. it quadrupled the problem. >> you are right. that bill did not solve a lot of issues. these people are who are going to be given a period of probation. they may have to wait 15 years to become citizens. i don't see how that is amnesty. >> they are legal and a lot of benefits and rights kick in. their legal status can never be taken back. it is a matter of time when do they become citizens. maybe it will be a shorter period of time. >> michele, what is your response? senator vittner makes this sound
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like a bad thing. the republican party claims to be the free moarket of movement. they get it right in capital goods, but when it comes to labor everybothing is a problem and wrong. people should be allowed to come and go at they please. >> based on economic conditions. >> if you want to come into the country -- >> it would go down dramatically. >> what michele is describing is a complete open border. >> yes, i am against that. i don't know anyone on capitol hill is for that. >> i was interested -- first of all, welcome back. i was interested in your column da today. you have heard senator vitter.
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what is your take. i think it is an incredible plan. first of all, we have to face the reality we have 11 million people in this country undocumented. that is not good for this country or the economy. that is not going to disappear. we have to face that reyagity. i say, i like senator vitter on many issues. i disagree on this issue. i think we start taxing these people. they are already benefiting from the social serve thes and encase system. so let's tax them. from a security point of view, this is helpful and i think that this is not an amnesty. you are letting people go of a crime. these people are going to have are to pay taxes and crimes.
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i cthink it is a brilliant program. the only thing stopping it is president obama if he does not agree to it. >> if this does not have border security in it. the republican party, to me, if you give the free flow of immigration for workers, there can still be border security, there could be -- right? anybody who wants to come for legitimate reason ares wants to come. >> right. >> larry, can i ask a question? >> what i want to say, all right i'll direct it tow. the gop should be the party of growth and opportunity and the party of entrepreneurship and the party of upward mobilitity. here is my point. if the brainyacs come in because we want them to stay and want to attract them and if the rest of
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the workforce lets go of the skills, they may climb the ladder of upwardmobility. why can't the gop see that? why can't they make this a growth issue? >> i'm all or that. the problem is when these folks come in, under this plan, they qualify for obamacare, social security and medicare. >> can i read you this? >> that is under the senate the plan. that is true with the senate plan. the fine print is important. >> this was in all of the reports in the last 48 hour. >> that they get a guest worker's card. and they have to tay tpay taxes have a background check. >> i'm saying they qualify for these program. >> no, they go into a
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probationary legal tat tus. they are not eligible. >> they immediately qualify for those three things and point two. the last time we did this, as 11 million illegals is a big problem. but the last time we did this, we had three million illegal aliens. i think it is pretty darn legitimate to ask why is this going to solve the problem this time. >> well, the last time they didn't put money into border security and it wasn't an issue. >> secondly, i don't mind people getting social services if he are paying taxes. we do have a problem with illegal aliens coming into this country but we need a growth program to bring the best and
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brightest. jeb bush has called for this program because we need better minds. this is one of the things the obama administration is against and it is hurting our technology administration. we can't get the employees with the hb1v visas. canada and other countries are bringing in great minds and growing their economy. >> hold on one second. the senator is conflating things like medicare and social security which you have to contribute to in order to receive. that is different than food stamps and welfare and section 8. that should be prohibited. >> if they pay their payroll taxes. >> what if they qualify for that the next day. i would qualify too but i wouldn't want to take it.
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>> you are kind to participate. >> thankses larry. appreciate it. >> michele, who knows a whole lot about this subject. you ought to get her book she has a whole shapt on it. >> a new report accuses super star alex rodriguez of getting the ban ned growth hormone. later on in the show, the rally resumed today. the dolly lenz is joining us live on the set and she is going to talk about whether the real estate market is really back. i believe immigrants should and can share in our successful free market capital list system. i'm kudlow we will be right back. [ engine revving ]
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i still has more left on his contract. but could he be headed in the way of lance armstrong? newspaper accuses a-rod and others of getting banned
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substances from a miami clinic. he denies it but his clear may be coming to an end. senior writer from sports illustra illustrated, tom, as always thank you. late breaking news on this. apparently espn is reporting, tom, that the yankees are now looking to void the reminder of a-rod's contract. do you know anything about that? can they do that? >> well, i think the second question is the most important one. i think they would be neglei get if they didn't consider that. he is coming off two hip surm y surgeries and admitted to ped use in 2009 and now comes the use that he perhaps engaged in
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it from 2009 to 2012. the yankee s have to investigat what their options are. i think that is a long shot for them to get out from under this contract. but they would like to put out the word. >> tom, you think bud sellick will get involved in the contract or throw the others out of baseball. because a-rod was there in the early 2000s and then he lied and came back last year. the guy is in terrible condition that is what these steroids do to you, they make you worse not better. where is the commissioner in this? >> they have been on this trail with the wellness clinics in south florida for the last six to 12 months. this was not the total shock to them, they have to vet this
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story and see if they can verify the information that is in the story. the story itself is not enough to bring down sanctions from mlb. but if they can verify what has been in the notebooks, then they could take some action. that still has to run it's course. is the paper reliable. if they have the goods, they are going to get into the investigator's hands. they have verified this story. they say they did get their hands on hand-written notebooks from the director of the clinic. transactions and money accounta. the miami new times were comfortable with the veracity in this piece. the question is does major league baseball if the same
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threshold. a-rod failed his doping test in 2003. this year major league baseball has a tougher testing program. if you impressed by that or is major league baseball going to be ameshed in this scandal for a long time? >> this story puts a clinic name and faces to a problem that has been happening for a number of years. since the testing, the players have tried to find a way around testing. hth, and synthetic testtosterone. there are newer protocols, there will be in-season testing and they have closed up the loophole on synthetics and there are
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players probably trying to think about ways to get around it. >> what about these other guys. nelson cruz, cabrera, how much trouble are they are? >> three of them are tied to positive tests and have been suspended from baseball. unless thighs information is esd to another time period. the other names that we heard. those are newer names. we are not sure of the level of involvement with the drug. i didn't appear to read in the story any banned substance. we need time for major league baseball to flush this out. this is just the beginning. we are going to leave it there.
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tom, we have a statement from a-rod. the news report about a purported relationship between alex rodriguez and anthony bosch are not true. he was not mr. bosch's patient. they are not legitimate. that is a rspokesperson. that is all that is out there on the committee print. now let us move on. we are going to talk about budget cutting and all of a sudden. today, harry reid, the senate majority leader wants to stop all the across the board cuts and i would say hell no to that.
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we'll hear from them later in the show. ♪ let's go. ♪ ♪ ♪ [ male announcer ] introducing the all-new cadillac xts... another big night on the town, eh? ...and the return of life lived large. ♪
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...so as you can see, geico's customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please? a bullish day not just for stocks, but housing went up. dolly lense is about to join us. who is she? if you don't know, just check this out. >> home to one of the most powerful brokers in the business. >> i've sold over $8.5 billion. >> the rich and famous turn to
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her to get the job done. >> we are going to have two unhappy bidders and brokering but such is life. >> and now she reveals all. >> tomorrow, see the live reveal research emotion unveils the new blackberry 10. will it put the company on the come back trail? squawk on the street tomorrow on cnbc.
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welcome back to "the kudlow report". i'm larry kudlow. in this day for stocks and real estate prices. are we out of the woods? we are going to get expert opinions on all of that. first up, with a march 1st deadline looming. senate leader harry reid said today democrats are considering short-term deferrales and they want a couple of those with tax revenue increases. this is all wrong. the spending should go through as it should be on march 1st. lower spending and smaller government will keep resources in the private sector and grow the economy. we have exclusively the senate's
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third ranking republican are. mr. john thune. do you make of it? >> right, and i got to tell you, larry, you kind of stole my talking points there. but they are proposing doing, is doing away with the sequester. doing away with the spending cuts and that is what we all voted for. and now you want to do away with that and replace it with tax increases. as far as we are concerned that has been dealt with. they are promoting now more taxes. they are talking about the budget, tax increases as well. that would be bad for the economy and it would cost us jobs and there are going to be republicans in the house and senate who are going to fight
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that. i think the automatic cuts are good for the economy. i think they are good for confidence in the markets and business. lower spending and limited government helps the market grow. we never cut spending. most of these are going to be cuts from the increase. ultimately what we do need to do is we have got to deal with what drives federal spending and that is the entitlement programs and that is social security medicare and medicaid and we continue to put pressure on other aspects of the budget. we don't do anything to reduce the size of the government. when we do that, it unleashes economic growth in the private economy. it does restore confidence in the government. we are supportive of the idea
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that the squaester should stay in place. unless they replace it with something in the budget. first of all, you know that is not going to happen. the minute you start monkeying around with changes you are going to lose it. and they are going to come back at you with taxes. can you tell me that you will stand behind the spending cut squaest sequester, will you stand behind this? >> absolutely. and they may try in the senate and they may have the votes to put something through that replaces it with revenues. if we have 41 republicans united we can stop that. we have the house of r representatives that tax increases is going to be a non starter. i'm confident that larry, republicans are going to be able to stop this from happening.
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they see real spending cuts happening on the horizon. >> so you will stick to it. paul ryan came out on sunday. this is the only spending cuts i see on the horizon, sir. will you commit that you will stand, you, the others, will you stand behind this thing? >> right, we will. and we got, defense hawks on the republican caucus that are concerned on the impact on the military we all are. and that is why we have proposed election that have replaced some of that spending cuts in the budget. but to your point, we have to stay committed and that is that we are going to reduce spending. we need to honor the american taxpayers deserve that. >> just as a last thought. we are five months into this
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deal. we are going to do march first. that is $24 billion lower in spending cuts. it seems to out of a $3.8 trillion budget you are down to 55 or $60 billion and most of that is slower growth rates. it seems to me everybody is cross the board can take that and the american public can see that we are not greece. >> the democrats want to do this with tax increases but that doesn't solve the problem. we know we have a spending problem and we need to honor the commitment that was made to the american people and we now need to tackle, we have to reform the programs social security and medicare and medicaid and others. we need to do it here and i believe republicans in the senate and house will do that. we'll see what the democrats try
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and do. what you heard from leader read today is a good indication of where they are headed. thank you very much for coming on the kudlow report. >> thank you larry. >> all right let's go to our panel. joining us now democratic strategist john halinko and steve moore, i love this. harry reid today wants to turn an across the board spending cut into a tax hike. >> it is hard for president obama to make the case against it because it was barack obama's idea in the first place to have it. now democrats are sprinting from it. the reason is democrats thought republicans wouldn't be able to swallow the sddefense cuts. but they came to the conclusion, it is the only way to cut
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spending and the idea that we are going to transfer and get rid of the sequester and raise taxes. if any single republican voted for that, i would want them extracted from the party. it is the opposite of what we want. we had the biggest tax increase weeks ago. >> what is the president's position going to be? is he going to team up with harry reid and turn this into a tax hike xwbill? >> what we need to do is focus on the long-term deficit. i agree. you raised the point about the need to get together and come up with a deal and eliminate the deficit, that would be great. but cutting a massive, massive cut in spending. but it is a bad idea. but you have a month. okay. march 1st is the deadline.
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five 12th of the fiscal year is over. that takes $24 billion out of the equation. so you are going to talk i don't know what the math is, i'm going to say $55 billion, nearly all of that is going to be slower growth. if we can't do that, then we can't do anything. remember, what we are doing here, that spending is somebody else's income. look, i'm all for long-term cutting. >> we have to start copying these programs. we gave $60 billion out in the relief bill. $40 billion of it was pork. the net cut here was almost zero. the economy was very soft. we can agree we want growth.
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>> but cutting spending is good for the economy. >> if you can cut spending and you don't reduce taxes you are sucking demand out of the economy. here is the problem, you said we have to cut the long-term deficit, and we shouldn't cut the programs the entitlements are the problem. wait a minute, who gave us obama care the biggest entitlement program we have ever had? it has been barack obama and harry reid. >> you hear the republicans on this very show back ago way from military cuts. >> they are not back ago way from it. >> they are going to replace some of it with cuts elsewhere. >> if they monkey with that bill the whole bill is going to collapse. the hit to the defense budge it and it is all national security
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is not going to be that great. it is a reduction in the rate of increase and you are looking at 712th of one year. because five months will have passed. the question here is this is never a good time to cut. i've been around. there is never a good time. there is always a reason not to cut spending and i'm tired of it. and at some point we are going to be like greece and illinois and california if we don't find some time to slow the growth and take un-necessary programs out. >> do it in the next five years. don't wait five years. do it now. >> don't have the cuts take place now. it is always maniana. >> and this is the same thing in
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the 1990s. we had the biggest boom we had in 20 years. >> and we had a tax increase that helped close the deficit. long-term interest rates were high and now they are very, very low. >> i tell you, lower spending is good for growth. that is the issue. i understand. there is a big disagreement here. if this turns out to be another tax hike bill we are going to pack it in. >> thank you very much. now, it is finally time for dolly. we are talking the rebound in real estate. how long can the rally last. >> dolly has her finger on the pulse of the new york wealth. >> i'm going to have lunch with dolly to see what she is hearing about the rich and the real
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housing prices saw their fasting housing gains since 2006. and that is up 5.5% year on year. dr hortond strong profits. that is the company's best quarter in six years and their stock popped today nearly 12%. here now is dolly lens and we welcome contrastant hunter currently a senior adviser to international solutions network. welcome. dolly, i loved your movie last
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night. i loved your thing on cnbc last night. bigger indexes government ind indexes show existing home prices up 11% up about the same. 14%. is this for real or are we bouncing off the bottom? >> i think we are bouncing off the bottom. it can't be for real until first time home buyers make up the bulk of new sales. until they are confident and make up the bulk of that number we are not for real. >> by the way, my wife and eye and our dog walk by the 95th street property i hope you will show it to us. you are talking high, high end. is it trickle down into the middle income people? >> again, like the first time
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home buyer part, that is where it hasn't trickled down yet. people are still renting, the rent-buy is not quite there yet. and also employment. if people aren't secure in their jobs. >> not enough income. >> worried about their kids what is going to happen to them when they graduate college. >> you are saying it is really not spread here and probably around the country not spread quite yet. it is stable and looking better and interest rates are keeping that going but we are not there yet. >> can you get a mortgage? if you don't own a home right now you are nuts if you wonyou buy one. if you look at the buy to rent
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ratio it is 1.1. this is the lowest the most favorable it has been for home buyers. if you don't own a home now, you have to buy one right now. this is a once in a life time opportunity. >> it is a bit like the winter of 2009 in the stock market. not exactly the same. you are seeing off the bottom and getting double digit price action. the fed is going to keep powurig money in and rates are going to stay low. 22% of homes are under water and 5% of those 1.8 million of those homes are only 5% under water. if we start getting these increases like we have been getting at a run rate at 5.5 a
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year if you fast forward to june you could have more like 350 billion under water homes at 12 to 13%. >> this will have an important impact. it will help banks feel more secure about increasing lending. they may start to restate their profits on these things and you will have a situation where more people will feel more confident of refinancing. >> another big thing. if you look at mortgages in terms of delinquent and foreclosed. >> it has improved. that is a big thing. >> particularly in states smart enough to allow them to take place and let the free market
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work. and you have a little slump. let's see, existing homes 4.4 months of inventory. that number was eight, nine, ten and 12 months. >> there is still a lot of that shadow and whisper inventory that is not listed. that is more of an excuse as to why volume is low. nar is coming out and saying it is cheap because. >> i've been trying to get my bathroom redone for months. it seems like a lot of people in my town are starting to put money back into their home. it seems like people are having more confidence and they are getting stuff down. >> and then they get their paycheck in january and it is smaller. and then they rethink the bathroom. but high taxes could be good for you.
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>> high taxes are great for me. >> december was the best month ever. i say let's go for another increase. >> kidding. >> i want you to have a good quarter. please stay right where you are. >> up next, we will focus on stocks. as we near that 4,000 mark on the dow. are we about to hit the ceiling. we will be right back. [ male announcer ] you are a business pro. omnipotent of opportunity.
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, rally on wall street rolls on. the dow pops 200 points shy of it's all time close of 14,164 in october of 2007. let's welcome back our guests. and bring back our panel of investors. jeff, welcome back. let me ask you this, you have lousesy consumer confidence numbers today. december 67 and january 59. i don't know what that means. the stock market is looking right through it. what does it mean and how long can this continue in stocks? >> it did coincide in january with tax increases. people really feeling it but not showing up in the stock market.
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the tail risk has come out of the equation. this is not about the day-to-day, but we have taken that extreme risk of the cliff and maybe the policy development in europe but that has helped to lift stocks here. this could take us a while to digest that. >>ereask it. i think it could be stronger. that is my take. how far can this rally go? how far is this rally going as you look out at the horizon. i'm worried. i think we might need to digest this for a while. as you look back hast year. we hit it in february and didn't break free of it in december. i'm worried that this is a longer consolidation by no means
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the end of the rally, that is party by the don't fight the fed here and it could be looking to slower stop policy towards the latter part of the year. >> dolly lense strong stock prices help real estate? >> without a doubt. >> stronger stock prices help real estate where prices are starting to go up? >> yes, and the low interest rates all a perfect storm. >> i think that is like a perfect combination. >> no question. >> i think it is good for stocks and until something really mean and nasty comes down. if we are going to have massive tax hikes every year. i don't think taxes help the economy. but you have easy fed. and low interest rates i'm saying right now easy fed low rates and stock market wealth
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and housing wealth. i think that spells a stronger economy which evolves. i would say two other things what is going on with the oil and gas boom and we are having a cap excycle. if you look at the durable goods number. if you look at it on a q over q rate. you are looking at new orders defense up 12. so co computer equipment up. >> we have global money printing. but i would play this market. >> almost $400. >> sit a race to the bottom. >> i would play this with commercial reads. along with the stock market. i like that. what concerns me are the
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financial whizes who want to impose a new tax on securities trading. i'm concern wednesday that. >> we'll get the business. >> if you trade it here, you are still taxed. that bothers me. if one person is in the oero zone. i think the saving move could be if we follow what richard fisher suggested and break up the big banks. get those banks lending again like the small banks that would be getter for the economy. >> did the rise in the capital gaining tax hurt your business? >> no. because it was lower than expected. it was only 5%. i think people were happy, in fact. expectation, right? >> if they rise it to 25 or 30% you will have a problem. >> exactly. >> i guess the case i'm trying to make, is that i think the stock market rally can go on for
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quite some time. we are making up for lost time. we have to make new ground, jeff. the nature and history of the price movement will continue. why can't this go on for another five, six, or seven years? >> i think 2013 is a turning point for investigate investor to stocks. selling after selling after selling. this is a turning point year. you had a low returning year. investors coming back. we had a pick come in 1987 but you had a long run. this is a year to get invested. a big year. >> they'll be pull backs along the way but we could be at the beginning of a long run. >> anyway, thanks to all of you terrific here. that is it for tonight's show.
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thank you for watching everybody. i'm larry kudlow. we will see you tomorrow night.
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cheap chic -- target. with $65 billion in sales, it's a retailing icon. >> it earns more than microsoft, dell, johnson & johnson. if you look up coca-cola's earnings, target earns more than any of those companies. >> more than 350,000 employees, more than 1,750 stores in 49 states, 30 million guests visit their stores in a single week. >> how do we move forward faster? how do we improve the profitability? how do we improve the guest experience? >> i think one of the smartest things target did was reach out to people who are excellent designers and have them do lines exclusively for the store. >> and then they can say, "i just got this isaac mizrahi dress at target for 50 bucks!" and it became almost a badge of honor to say that. >> target's growing enormously. target's in places that you wouldn't expect to see a discounter. >> we want to be america's favorite store.
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we want them to drive by all other retail competitors because there's something special about target. >> hi. my name is russell simmons, and i love target. >> my name is katrina bowden, and i love target. >> hi. i'm kelly rowland, and i love target. >> july 2010, target rolls out the red carpet, literally. it's a celebration for the opening of its 1,743rd store, the first ever on the island of manhattan. >> target in manhattan is like mecca. >> i'm thrilled. i mean, i'm a new yorker, so it's fantastic that they're finally here. >> it's such a relief. finally. i love that they picked this location. >> the location is a sprawling 174,000-square-foot complex in
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spanish harlem. >> target in new york -- first of all, it's like a village here. >> they've got everything you can possibly think of under this roof right here. >> over the last two decades, target has become a powerhouse in mass retail while developing an almost cult-like following. >> i have target sheets. i have target pillows. >> we have been waiting for target to come. >> everybody needs a target. >> some of america's hottest designers are enlisted to create exclusive lines for the harlem store. >> so, tell me about your collection. >> it's very colorful, lots of fun. >> oh, we're so excited. we're so happy to be collaborating with target. >> from the runway to main street, target transcends retail. >> yes, "tar-jay" is everywhere. >> i love to shop "tar-jay." >> i shop at "tar-jay," target all the time. >> so, how did this discount chain become a pop-culture phenomenon? in the mid-1990s, target explodes in size and popularity. today, an ni